Seminar Question

Blackmore plc

Blackmore plc is preparing its accounts for the year ended 31 December 2018.  The following amounts for non-current assets have been extracted from the books after charging depreciation for 2018:

The following additional information is available:

1. Doone House was acquired in 2011 and is used as a warehouse. The original cost includes £100,000 for land.

2. The factory valuation includes £200,000 for freehold land. The property was originally purchased 26 years ago for £600,000 including £80,000 for land.

3. The shops are not occupied by Blackmore plc but are rented out at commercial rates to tenants. The properties were acquired 10 years ago for £504,000 (including £144,000 for land) but have never been depreciated.  The valuation at 31.12.2017 was carried out by a local firm of Chartered Surveyors.  They have also valued the properties at 31.12.2018 at a value of £1,480,000.

4. Ridd House provides office accommodation for Blackmore plc and was acquired under an 80-year lease.

5. In order to provide extra warehouse space, Oare House was purchased on 30 June 2018 under a 99-year lease.

6. It is the policy of Blackmore plc to depreciate all freehold buildings over 50 years.  Freehold land is never depreciated. Leasehold properties are depreciated over the period of the lease.

Required:

Prepare the appropriate notes covering non-current assets in a form suitable for publication in the financial statements of Blackmore plc at 31 December 2018.